India won’t hammer out a free trade agreement (FTA) with Israel until it gets a good deal, as the pact has to be “reciprocally beneficial”, commerce and industry minister Piyush Goyal said, indicating that Israel has to sweeten its market access offer for any such FTA to be a reality.
Israel’s tariffs on goods are, as such, very low for all and it’s yet to commit to opening up its services sector for India, the minister said. Both the countries, with bilateral annual trade of about $8 billion now, have been engaged in FTA negotiations since May 2010 without much success. Israel’s trade-weighted average applied tariff stood at just 3.7% in 2020.
Interacting with the Indian community here, Goyal said the FTA negotiations with the EU will take about one-and-a-half or two years to fructify, given the complexity of negotiating with a 27-member bloc and firming up a new-age FTA that goes well beyond the traditional pillars of just goods, services and investment.
“We are in active negotiations with the UK, Canada and the EU. Out of these, the UK would probably happen soon now that the new government is in place there,” Goyal said. The optimism also stems from the fact that the UK’s new Prime Minister Liz Truss had a key role in the FTA negotiations between the two countries in her earlier roles as the secretary of international trade as well as the foreign secretary of her country.
Elaborating on the FTA talks with various economies, Goyal said: “We have three other sets of countries – the Russian group of five countries, Switzerland and a group of 3-4 countries that are very keen to do FTA with India,” the minister said.
“I am trying to assess whether Switzerland and other countries bring something substantive to the table which is good for India. The (Swiss) minister is coming in a week or two to India, the agenda is FTA. Last time, I had kind of conclusively said we are not very keen on this. If he gives me an offer that I can’t refuse, maybe we will do it,” he said.
The negotiations with the GCC (Gulf Cooperation Council) members, he said, may be launched “very soon”. The GCC comprises six countries–Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Of course, earlier this year, India signed an FTA with the UAE, New Delhi’s first such trade pact in about a decade.
ONDC launch in one or two cities this month: Goyal
Commenting on the mega launch of the Open Network for Digital Commerce (ONDC), an initiative to “democratise e-commerce” in India, Goyal said he was “looking at opening it to the public in one or two cities” this month.
“The Beta testing is currently going on….I want to make sure that when we come up for public launch, it’s well tried and tested and has sufficient capacity to handle large volumes, and the platforms which come on to the ONDC are sanitised,” he said.
“I don’t think we should rush into things. We would rather focus on making a good offer to the people in general.”
Earlier this year, the ONDC had started pilot projects in six cities. It was expected to be launched for the broader public in August.
The ONDC network will enable the display of products and services from all participating e-commerce platforms in search results across all applications on the network.
(The reporter is in San Francisco at the invitation of the CII)